Nativity scenes in the Californian city of Santa Monica will be erected on private property after being banned from a public park where they have been displayed for six decades.

The move was the latest twist in a bitter dispute between Christians and atheists over the First Amendment to the US Constitution and the separation of church and state.

Nativity scenes are traditionally put up in Palisades Park, a popular tourist destination on the Pacific Ocean, but last year atheists won the right to use 18 of the 21 pitches allotted by the city council in a lottery.

Signs erected included one saying: "37 million Americans know myths when they see them."

In order to end the dispute the liberal city subsequently announced a ban on all displays this Christmas.

Last week Christians failed in a legal attempt to overturn the ban. A judge ruled that the city did have the right to prohibit displays in public areas.

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Christian campaigners have called that decision an "erosion of First Amendment liberty for religious speech."

The Nativity scenes will now be erected on a private industrial estate nearly 30 blocks inland.

In a statement Hunter Jameson, chairman of Santa Monica's Nativity Scenes Committee, said: "We are deeply grateful for the use of this new site to allow all of Santa Monica's distinctive Christmas story to continue spreading the message of joy, hope and peace found in the Christ child's birth."

Annie Laurie Gaylor, co-president of the Freedom From Religion Foundation, told the Los Angeles Times: "Well, hallelujah, praise secularism. This move is great. But it does undercut any argument they have that they don't have free expression. Obviously, they do."